Saved Help Save & Exit Submit 2 Check my work Rainey Enterprises loaned $40,000

Question

Saved Help Save & Exit Submit 2 Check my work Rainey Enterprises loaned $40,000 to Small Co. on June 1, 2018, for one year at 9 percent interest. Required Show the effects of the following transactions in a horizontal statements. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (A), or a financing activity (FA). The letters NA indicate that an element is not affected by the event. (Do not round intermediate calculations and round final answers to nearest dollar amount. Enter any decreases to account balances and cash outflows with a minus sign.) 4 points (1) The loan to Small Co. (2) The adjusting entry at December 31, 2018. (3) The adjusting entry and collection of the note on June 1,2019. eBook Hint RAINEY ENTERPRISES Horizontal Statements Model Assets =| Equity Income Statement Statement of Cash Flow Date : Net Income! ReceivableInterest Receivable Earnings Revenue 2. 12/31/18 Mc Graw

Explanation / Answer

Interest Receivable on Dec.31,2018 $    2,100 (7/12)*40000*0.09 Interest Receivable on June.1,2019 $1,500 (5/12)*40000*0.09 RANEY ENTERPRIZE Horizontal Statement Model ASSETS Equal to Equity INCOME STATEMENT Date Cash Plus Notes Receivable Plus Interest Receivable Equal to Retained Earnings Revenue Minus Expense Equal to Net Income Statement of Cash flow 1 6/1/2018 ($40,000) plus $40,000 ($40,000) FA 2 12/31/2018 $2,100 equal to $2,100 $2,100 3 6/1/2019 $40,000 plus ($40,000) $40,000 FA 6/1/2019 $1,500 equal to $1,500 $1,500 6/1/2019 $3,600 plus Plus ($3,600) $3,600 OA

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